CAPITAL SECURE DIVIDEND
ARISTOCRATS BOND
Up to 145% of Index Returns,
Dividends also Included in Total Returns,
Capital Appreciation Potential of Quality Companies that
Increased Dividends Consecutively Every Year for at Least 25 Years.
*Capital Protection at Maturity Provided by KBC Bank Ireland. Closing Date 10th May 2013.
Personal Investments • Pension Funds • ARF/AMRF
Corporates • Charities • Institutions
R
CAPITAL SECURE DIVIDEND
ARISTOCRATS BOND
Investment summary:
Only high quality Blue Chip companies which have consistently increased their dividend payments to investors every single
year for at least 25 years in succession are selected for the S&P Dividend Aristocrats Index. This index includes the dividend
income as well as the potential capital growth of high quality Blue Chip U.S. companies that have consecutively increased
dividend payments to investors every year for at least the last 25 years in a row. This Bond’s returns are linked to the S&P
Dividend Aristocrats Risk Controlled Index (SPXD10EE Index) which provides up to 150% exposure to the capital
appreciation and dividend income from the S&P Dividend Aristocrats index. The Capital Secure Dividend Aristocrats Bond
offers investors significant income and capital growth potential and a choice of two capital protected investment options.
Option A:
•
•
•
•
100% Capital Protection at maturity provided by KBC Bank Ireland.
50% of the capital growth and dividend income achieved within the risk controlled index.
No upper limit or cap on potential investment returns.
Investment Term of 3 years 11 months, with returns averaged over the final 6 months.
Option B:
•
•
•
•
90% Capital Protection at maturity provided by KBC Bank Ireland.
145% of the capital growth and dividend income achieved within the risk controlled index.
No upper limit or cap on potential investment returns.
Investment Term of 3 years 11 months, with returns averaged over the final 6 months.
Investors can also invest proportionately between options A & B. For example, investors that allocate their funds between
each of the Options (50% in Option A + 50% in Option B) will benefit from an average of 95% capital protection and
an average of 97.5% participation in any return. There is no upward cap or limit on the returns for investors.
• Closing Date:
10th May 2013.
• Min. Investment: €10,000 for each of the options.
• Structure:
Bank Deposit with KBC Bank Ireland plc.
• Tax:
Subject to DIRT where applicable.
Risk Control: The Capital Secure Dividend Aristocrats Bond manages risk by reducing its exposure to the underlying
index in times of high volatility and increasing exposure in times of low volatility. The bond is structured so that the
actual volatility is compared to the 10% target volatility every trading day (Index volatility as of 15th February 2013
was 10.4%). If the actual volatility increases beyond 10% exposure to the S&P Dividend Aristocrats index will be
temporarily reduced to keep volatility at a maximum level of 10%, when volatility falls below 10%, exposure to the
index will subsequently be increased up to a maximum of 150%. Please see risk control section for further information.
In order to protect performance from short term volatility returns are averaged over the final 6 months of the investment
term.
How Dividend Income Impacts on the Index: It should be noted that while dividend income accrues for the benefit
of investors in underlying stocks, when dividends are paid on the stocks in the index they are reinvested into the
underlying index and so increase the index returns.
Warning: Past performance is not a reliable guide to future performance.
Warning: If you invest in this product you will not have any access to your money for 3 years and 11
months
Warning: The value of your investment may go down as well as up.
In respect of monies invested in Option B only (ie. Where there is a full or partial investment in Option B):
Warning: The value of your investment may go down as well as up. You may get back less
than you invest.
Warning: If you invest in this product you could lose 10% of the money you invest.
2
CANTOR FITZGERALD IRELAND LTD.
CAPITAL SECURE DIVIDEND
ARISTOCRATS BOND
The S&P Dividend Aristocrats
The S&P Dividend Aristocrats Index was launched on 2nd May 2005 and is designed to measure the performance
of large cap, blue chip companies within the S&P 500 that have followed a policy of consistently increasing
dividends every year for at least 25 years. The current annual dividend yield on the index is in excess of 2.7%*
per annum. Dividends are reinvested into the index and are accounted for in the index growth figures. Drawn
from the members of the US S&P 500 stock market index, the Aristocrats Index is equal-weighted, with
constituents being re-weighted every quarter. The minimum number of constituent stocks is 40, currently there
are 54 stocks from a broad spectrum of industries in the index. The Dividend Aristocrats index portfolio has both
capital growth and dividend income characteristics and the index constituents had a combined market
capitalization of $1,035 billion ($ 1.035 trillion) as of February 2013. The average market cap of stocks in the
index is $19 billion.
The S&P Dividend Aristocrats 10% Risk Control Index Stock Market
Outperformance
The S&P 500 Dividend Aristocrats index is a measure of performance of true blue-chip companies. Over the last
5 years the S&P Dividend Aristocrats Index with 10% risk control (SPXD10EE Index) has outperformed traditional
market indices by a wide margin, it outperformed the US S&P 500 by 36.4%, outperformed the UK FTSE 100
index by 30.3%, and the Japanese Nikkei 225 index by 61.2% as per the chart below:
S&P Dividend Aristocrats Index with 10% risk control (SPXD10EE Index) Vs. Major Market Indices over last 5 years.
45%
S&P Dividend Aristocrats Index with 10% Volatility Control (SPXD10EE Index)
40%
FTSE 100 Index
35%
S&P 500 Index
30%
30.4%
NiKKEI 225 Index
25%
20%
36.4%
15%
10%
5%
61.2%
0%
- 5%
- 10%
- 15%
- 20%
- 25%
- 30%
- 35%
- 40%
- 45%
Feb 2013
Oct 2012
Dec 2012
Jun 2012
Aug 2012
Feb 2012
Apr 2012
Oct 2011
Dec 2011
Jun 2011
Aug 2011
Feb 2011
Apr 2011
Oct 2010
Dec 2010
Jun 2010
Aug 2010
Apr 2010
Feb 2010
Oct 2009
Dec 2009
Jun 2009
Aug 2009
Apr 2009
Feb 2009
Oct 2008
Dec 2008
Jun 2008
Aug 2008
Apr 2008
Feb 2008
- 50%
Figures as at 15th February 2013, Data Source: Bloomberg.
*Source: S&P Dow Jones Indices Dividend Aristocrats Factsheet 31st December 2012.
Warning: Past performance is not a reliable guide to future performance.
Warning: The value of your investment may go down as well as up. You may get back less than
you invest.
CANTOR FITZGERALD IRELAND LTD.
3
CAPITAL SECURE DIVIDEND
ARISTOCRATS BOND
Capital Secure Dividend Aristocrats Bond
The new Capital Secure Dividend Aristocrats Bond from Cantor Fitzgerald Ireland Ltd. offers investors the
opportunity to participate in the income and growth performance of some of the leading dividend paying U.S.
companies whilst, at the same time, protecting the investment from potential capital loss. Dividend stocks can
provide investors with a combination of capital gains and regular cash flow. Thus investors in high quality dividend
paying stocks have two ways to make a return:
1. Capital Gains: The stock price goes up, so shares are worth more than when they were bought.
2. Dividends: The company rewards its shareholders with regular dividend payments.
The returns from this bond are linked to the performance of the S&P Dividend Aristocrats 10% Risk Controlled
Index (SPXD10EE Index). Unlike many other indices this index includes the dividend income of the companies,
while also providing capital appreciation potential. This index only selects companies that have increased their
dividends each and every year for at least the last 25 years in a row. As the index currently yields around 2.7%
in annual dividends, this is likely to make a substantial contribution to potential returns.
Dividend-paying stocks reward investors with cash payments to hold their shares and can provide a source of
steady income. Dividend Stocks can buffer market volatility, provide a potential hedge against inflation, and also
offer the potential for capital appreciation. As interest rates and bond yields have fallen over the past decade,
many investors are increasingly turning to high quality dividend paying stocks. History has shown that dividends
have been a very important component of overall return in a diversified investment portfolio. Remarkably,
dividends have accounted for more than 50% of the overall return from stocks since 1930*. Company
management usually consider maintaining or increasing the dividend level as a priority, given the negative signal
that cutting a dividend would send to the market regarding future growth prospects.
Cantor Fitzgerald Ireland Ltd. expects that dividends will continue to make up a large portion of the stock market’s
overall return. Many of today’s investors are looking for both a stable source of income and the potential for
capital appreciation, features that may be offered by a portfolio that includes dividend-paying stocks. However
many also want the added security of capital protection**, which this innovative new bond provides.
*Source: Strategas Investment Research: A Continued Dividend Trade? By: Jason Desena Trennert, 08/27/2012.
**Capital Protection at the Maturity Date is provided by KBC Bank Ireland plc
Warning: Past performance is not a reliable guide to future performance.
Warning: If you invest in this product you will not have any access to your money for 3 years and 11
months.
4
CANTOR FITZGERALD IRELAND LTD.
CAPITAL SECURE DIVIDEND
ARISTOCRATS BOND
Risk Control and Enhanced Exposure: The Dividend Aristocrats Risk Controlled Index (SPXD10EE Index) uses
a volatility control mechanism, a mathematical algorithm designed to control the level of risk of the underlying
Dividend Aristocrats index by establishing a specific volatility target and dynamically adjusting the exposure to
the Dividend Aristocrats Index based on its observed volatility. If the risk level reaches a threshold that is too
high, the cash level is increased in order to maintain the target volatility. If the risk level is too low, then the index
will employ leverage to maintain the target level of volatility. The Index’s maximum level of exposure to the
Dividend Aristocrats index is limited to 150%, but investors in this bond can have maximum exposure of up to
217.5% of the Dividend Aristocrat’s Index.
Maximum Exposure to Dividend Aristocrats Index using 10% Risk Control mechanism:
Option A: 50% Participation in Dividend Aristocrats Risk Controlled Index (SPXD10EE Index)
which in turn provides up to 150% exposure to Dividend Aristocrats Index
= 75% Maximum potential exposure to Dividend Aristocrats index.
Option B: 145% Participation in Dividend Aristocrats Risk Controlled Index (SPXD10EE Index)
which in turn provides up to 150% exposure to Dividend Aristocrats Index
= 217.5% Maximum potential exposure to Dividend Aristocrats index.
Diversification: Companies included in the S&P 500 Dividend Aristocrats index come from a broad spectrum of
industries. Unlike indices that focus only on high dividend yields, which are typically from the Financials and
Utilities sectors, the “Dividend Aristocrats” are well diversified across all sectors and many industries. This removes
the risk of your portfolio being tied to just a narrow slice of the market. The index portfolio has both capital
growth and dividend income characteristics, as opposed to portfolios that are pure yield or pure capital
appreciation oriented.
Not only are the index constituents current members of the S&P 500, they have also been paying increasing
dividends year after year for at least 25 years. Given these stringent criteria, the number of “Aristocrats” within
the S&P 500 has remained relatively stable over the years. Stocks are equally weighted in the index.
Dividend Aristocrats Index Weight %
Consumer Staples
Industrials
Financials
12.6%
Consumer Staples
24.3%
Materials
12.8%
Industrials
15.1%
Consumer
Discretionary
13.1%
Health Care
13.2%
Health Care
Consumer Discre onary
Materials
Financials
Energy
Telecommunica ons
Informa on Technology
U li es
Source: S&P Dow Jones Indices February 15, 2013
Warning: The value of your investment may go down as well as up. You may get back less than
you invest.
CANTOR FITZGERALD IRELAND LTD.
5
CAPITAL SECURE DIVIDEND
ARISTOCRATS BOND
The “Dividend Aristocrats” An Index of Blue
Chip High Quality Companies:
The average dividend yield of the Dividend Aristocrats portfolio is an attractive 2.7% per annum (as at 31st Dec
2012). Dividends earned are reinvested back into the index, buying more shares, which in turn can produce
more income to buy more shares, and so on. Through the power of compounding of dividends, and the added
effect of consistent dividend growth, returns for investors can be substantially amplified. The index has a good
balance of growth and value stocks, it is trading at an average of 16 times earnings and has an impressive
average dividend growth rate of 11.1%, Dividend cover is 2.6 times.
Dividend Aristocrats
Constituent
3M Co
AFLAC Inc
AT&T Inc
AbbVie Inc.
Abbott Laboratories
Air Products & Chemicals Inc
Archer-Daniels-Midland Co
Automatic Data Processing
Bard C.R. Inc
Becton Dickinson & Co
Bemis Co Inc
Brown-Forman Corp B
Cardinal Health Inc
Chevron Corp
Chubb Corp
Cincinnati Financial Corp
Cintas Corp
Clorox Co
Coca-Cola Co
Colgate-Palmolive Co
Consolidated Edison Inc
Dover Corp
Ecolab Inc
Emerson Electric Co
Exxon Mobil Corp
Family Dollar Stores Inc
Franklin Resources Inc
Genuine Parts Co
Grainger W.W. Inc
HCP Inc
Hormel Foods Corp
Illinois Tool Works Inc
Johnson & Johnson
Kimberly-Clark
Leggett & Platt
Lowe's Cos Inc
McCormick & Co
McDonald's Corp
McGraw-Hill Cos Inc
Medtronic Inc
Nucor Corp
PPG Industries Inc
Pentair Limited
PepsiCo Inc
Procter & Gamble
Sherwin-Williams Co
Sigma-Aldrich Corp
Stanley Black & Decker
Sysco Corp
T Rowe Price Group Inc
Target Corp
VF Corp
Wal-Mart Stores
Walgreen Co
Stock Symbol
Sector
Annual Dividend
Yield 2012
Price / Earnings
Ratio
Annual Dividend
Growth Rate
MMM US
AFL US
T US
ABBV US
ABT US
APD US
ADM US
ADP US
BCR US
BDX US
BMS US
BF/B US
CAH US
CVX US
CB US
CINF US
CTAS US
CLX US
KO US
CL US
ED US
DOV US
ECL US
EMR US
XOM US
FDO US
BEN US
GPC US
GWW US
HCP US
HRL US
ITW US
JNJ US
KMB US
LEG US
LOW US
MKC US
MCD US
MHP US
MDT US
NUE US
PPG US
PNR US
PEP US
PG US
SHW US
SIAL US
SWK US
SYY US
TROW US
TGT US
VFC US
WMT US
WAG US
Industrial products
Insurance
Telcom
Pharma
Health Care
Chemicals
Agri
IT
Medical Devices
Medical Devices
Packaging
Beverages
Health care
Oil & Gas
Insurance
Insurance
Business Supplies
Consumer products
Beverages
Consumer products
Power Generation
Industrial products
Cleaning products
Electronic equip.
Oil & Gas
Retail
Asset Management
Parts Distribution
Parts Distribution
Real Estate
Food
Industrial products
Health Care
Consumer products
Industrial products
Retail
Food
Restaurants
Media
Medical Devices
Basic Materials
Chemicals
Industrial products
Beverages
Consumer products
Chemicals
Chemicals
Machine tools
Food
Asset Management
Retail
Apparel
Retail
Retail
2.5%
2.9%
5.1%
4.3%
1.6%
2.9%
2.4%
2.8%
0.8%
2.2%
2.8%
1.6%
2.4%
3.1%
2.0%
3.7%
1.4%
3.1%
2.7%
2.3%
4.4%
1.9%
1.2%
2.8%
2.6%
1.9%
0.8%
2.8%
1.4%
4.4%
1.9%
2.4%
3.2%
3.3%
3.8%
1.6%
2.1%
3.3%
2.5%
2.2%
3.1%
1.7%
1.7%
2.9%
2.9%
1.2%
1.1%
2.5%
3.5%
1.9%
2.3%
2.2%
2.3%
2.7%
15.1
7.6
14
12
17.41
15.3
12.6
21
16
15.4
15.6
23.9
13.2
9.4
12.62
23.45
17.43
18.8
17.4
19
14.8
13.86
25.2
16.2
11.1
14
14.4
17.6
19.5
23.5
18.4
14.7
14
16.2
18.9
22.6
20
16.1
13.2
12.8
19.5
17.9
16.5
16.7
18.8
21
18.5
14.2
16.7
19.2
12.8
14.4
14
12.7
4.60%
9.73%
3.85%
5.14%
5.14%
10.99%
8.52%
10.58%
6.01%
12.58%
3.51%
26.20%
16.48%
9.18%
7.17%
2.67%
6.83%
10.79%
8.45%
11.49%
0.89%
11.55%
11.81%
7.57%
10.25%
12.80%
44.54%
6.28%
17.98%
2.50%
14.32%
8.59%
8.18%
6.90%
7.89%
16.41%
9.14%
13.86%
33.83%
16.09%
9.70%
2.78%
7.50%
8.35%
9.93%
4.36%
11.70%
8.09%
6.65%
25.77%
20.64%
6.32%
12.56%
23.70%
Data Source: Bloomberg 18th February 2013.
Warning: Past performance is not a reliable guide to future performance.
6
CANTOR FITZGERALD IRELAND LTD.
CAPITAL SECURE DIVIDEND
ARISTOCRATS BOND
Illustration of Potential Returns
over last 3 years 11 months
The table below is an illustration of how the Capital Secure Dividend Aristocrats Bond would have performed
over the last 3 years 11 months, based on the actual back tested figures for the Dividend Aristocrats Risk
Controlled Index (SPXD10EE Index) as at 19th February 2013 and an assumed DIRT rate of 36%. In order to
protect performance from short term volatility returns are averaged over the final 6 months of the term.
Example of a €100,000 Investment in the Capital Secure Dividend Aristocrats Bond
Option A €100,000 is invested for a term of 3 years & 11 months.
Dividend Aristocrats Risk Controlled Index (SPXD10EE Index) performance:
• Start price on 19th March 2009 = 100.00
• Final price on 19st February 2013 = 56.67% gain (12.14% CAR)
• Final 6 Month Average = 150.32 = 50.32% gain (10.96% CAR)
(Investment is 100% capital protected* with 50% participation in index return).
€100,000 investment x 25.16% gain + €100,000 protected amount = €125,160 gross return.
Return = + 25.16% Gross = 5.89% CAR (Compound Annual Rate).
Option B €100,000 is invested for a term of 3 years & 11 months.
Dividend Aristocrats Risk Controlled Index (SPXD10EE Index) performance:
• Start price on 19th March 2009
= 100.00
• Final price on 19st February 2013 = 156.67% gain (12.14% CAR)
• Final 6 Month Average= 150.32 = 50.32% gain (10.96% CAR)
(Investment is 90% capital protected* with 145% participation in index return).
€100,000 investment x 72.964% gain+€90,000 protected amount= €162,964 gross return.
Return = + 62.96% Gross = 13.27% CAR (Compound Annual Rate).
Dividend Aristocrats Risk Controlled Index (SPXD10EE Index) performance:
55%
50%
S&P Dividend Aristocrats Index with 10% Vola lity Control (SPXD10EE Index)
6 Month Final
Average Price
45%
40%
35%
30%
25%
20%
15%
10%
5%
Feb 13
Jan 13
Dec 12
Nov 12
Oct 12
Sep 12
Aug 12
Jul 12
Jun 12
May 12
Apr 12
Mar 12
Feb 12
Jan 12
Dec 11
Nov 11
Oct 11
Sep 11
Aug 11
Jul 11
Jun 11
May 11
Apr 11
Mar 11
Feb 11
Jan 11
Dec 10
Nov 10
Oct 10
Sep 10
Aug 10
Jul 10
Jun 10
May 10
Apr 10
Mar 10
Feb 10
Jan 10
Dec 09
Nov 09
Oct 09
Sep 09
Aug 09
Jul 09
Jun 09
May 09
Apr 09
Mar 09
0%
Source: Bloomberg 19 February 2013.
Warning: Past performance is not a reliable guide to future performance.
Warning: The value of your investment may go down as well as up. You may get back less
than you invest.
Warning: These figures are estimates only. They are not a reliable guide to the future
performance of this investment.
CANTOR FITZGERALD IRELAND LTD.
7
CAPITAL SECURE DIVIDEND
ARISTOCRATS BOND
Illustration of Potential Returns
There is no limit or upward cap on investors’ potential returns which are based on the performance of the
Dividend Aristocrats Risk Controlled Index (SPXD10EE Index). The table below is for illustrative purposes only
using an assumed DIRT rate of 36%:
Option A Return Illustration - Conservative Option:
Dividend Aristocrats
10% Risk Controlled
Index
Performance
Participation In
Index return
Investment
Return
Capital
Protected
Amount
After Tax Return to investor
including original capital
Gross Return to investor
including original capital
10%
50.0%
5.00%
100%
103.20% (0.81% CAR)
105.00% (1.25% CAR)
25%
50.0%
12.50%
100%
108.38% (1.98% CAR)
112.50% (3.05% CAR)
50%
50.0%
25.00%
100%
116.00% (3.86% CAR)
125.00% (5.86% CAR)
75%
50.0%
37.50%
100%
124.00% (5.65% CAR)
137.50% (8.47% CAR)
100%
50.0%
50.00%
100%
132.00% (7.35% CAR)
150.00% (10.91% CAR)
-10%
0.0%
0.00%
100%
100% (0.00% CAR)
100.00% (0.00% CAR)
-99%
0.0%
0.00%
100%
100% (0.00% CAR)
100.00% (0.00% CAR)
50% A and 50% in Option B Return Illustration - Medium Option:
Dividend Aristocrats
10% Risk Controlled
Index
Performance
Participation In
Index return
Investment
Return
Capital
Protected
Amount
After Tax Return to investor
including original capital
Gross Return to investor
including original capital
10%
25%
97.5%
9.750%
95%
103.04% (0.77% CAR)
104.750% (1.19% CAR)
97.5%
24.375%
95%
112.40% (3.03% CAR)
119.375% (4.67% CAR)
50%
97.5%
48.750%
95%
128.00% (6.51% CAR)
143.750% (9.71% CAR)
75%
97.5%
73.125%
95%
143.40% (9.64% CAR)
168.125% (14.18% CAR)
100%
97.5%
97.500%
95%
159.2% (12.60% CAR)
192.500% (18.20% CAR)
-10%
0.0%
0.000%
95%
95% (-1.30% CAR)
95.00% (-1.30% CAR)
-99%
0.0%
0.000%
95%
95% (-1.30% CAR)
95.00% (-1.30% CAR)
Option B Return Illustration - Growth Option:
Dividend Aristocrats
10% Risk Controlled
Index
Performance
Participation In
Index return
Investment
Return
Capital
Protected
Amount
After Tax Return to investor
including original capital
Gross Return to investor
including original capital
10%
145.0%
14.50%
90%
102.88% (0.73% CAR)
104.50% (1.13% CAR)
25%
145.0%
36.25%
90%
116.80% (4.04% CAR)
126.25% (6.13% CAR)
50%
145.0%
72.50%
90%
140.00% (8.97% CAR)
162.5% (13.20% CAR)
75%
145.0%
108.75%
90%
163.20% (13.31% CAR)
198.75% (19.17% CAR)
100%
145.0%
145.00%
90%
186.40% (17.23% CAR)
235.00% (24.38% CAR)
-10%
0.0%
0.00%
90%
90% (-2.65% CAR)
90.00% (-2.65% CAR)
-99%
0.0%
0.00%
90%
90% (-2.65% CAR)
90.00% (-2.65% CAR)
Warning: The value of your investment may go down as well as up. You may get back less
than you invest.
Warning: These figures are estimates only. They are not a reliable guide to the future
performance of this investment.
In respect of monies invested in Option B only (ie. Where there is a full or partial investment in Option B):
Warning: If you invest in this product, you could lose 10% of the money you invest.
8
CANTOR FITZGERALD IRELAND LTD.
CAPITAL SECURE DIVIDEND
ARISTOCRATS BOND
Why Invest in Dividend Stocks?
Dividends Can Grow: The S&P Dividend Aristocrats Index selects companies that have consistently increased
their dividends year on year for at least twenty five years. The S&P 500 US stock market index also has a long
history of increasing dividend payments. The chart below illustrates the growth in dividend income for the S&P
500 Index vs. interest income from the Barclays Capital U.S. Aggregate Bond Index since 1979. As shown below,
S&P 500’s annual dividend income from a $100,000 investment grew from $5,234 to $21,058, versus an actual
decline in annual bond income received from the Barclays Bond index over the same period. Stock prices tend
to follow dividend growth over time. So dividend growth is not only important for income, but also for capital
appreciation. Given the similar increasing dividend payment characteristics mentioned, the S&P 500 is being
used in graphs below for illustration purposes.
Dividend Growth Outpaces Bond Income (1979-2010).
S30000
S&P 500
S25000
Barclays Capital Aggregate Bond Index
S20000
S15000
$21,058
S10000
$3,666
S50000
S0
79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10
Source: Fayez Sarofim & Co. Data as of 12/31/10.
Dividends Are A Major Portion of Returns: Over the long term dividends have been a significant contributor
to the returns produced by equities. When an investor holds a stock for a reasonable time frame, a growing
dividend becomes an increasingly significant value creator when compared to what was originally paid for the
shares. The yield on your original investment can multiply as dividends are increased over time. Multiple expansion
(an increase in the stock price earnings ratio) tends to be a less significant contributor to long term returns.
Dividend Growth Drives the Majority of Return, Composition of Average Annual Returns, 1981-2011.
14%
12%
10%
8%
Dividend Yield
Dividend Growth
4.3%
Mul ple Expansion
3.3%
7.8%
5.0%
7.1%
2%
0%
-2%
-4%
1.0%
0.1%
UK
US
3.1%
2.9%
6%
4%
4.3%
3.6%
8.0%
5.0%
-1.1%
-0.8%
France
Germany
6.4%
1.6%
2.5%
1.4%
-2.5%
0.4%
Australia
Canada
Japan
Source: Société Générale. Data as of 30/09/11, UK, US, France, Germany, Australia & Japan represented by MSCI country indices in local
currency.
Dividend Payout Ratio: The dividend payout ratio is an indication of how much of a company’s profits are
used to pay dividends, this ratio is currently relatively low by historical standards (under 30% for the S&P 500
index), so many companies appear to have the room to raise their dividends further.
Warning: Past performance is not a reliable guide to future performance.
Warning: The value of your investment may go down as well as up. You may get back less
than you invest.
CANTOR FITZGERALD IRELAND LTD.
9
CAPITAL SECURE DIVIDEND
ARISTOCRATS BOND
Financial Strength: The regular payment of a dividend can impose a discipline on a company which may lead
to a level of conservatism in the management of a company’s financials. As a result, companies which pay
dividends typically may be relatively stable, financially strong and well managed businesses. The payment of a
dividend can be a signal of a company’s financial strength and confidence in its future growth prospects.
Therefore it is not surprising that history has shown that companies that continually raise their dividend not only
have outperformed the broader market index, but have done so with less risk (volatility) as measured by standard
deviation*.
An Inflation Hedge: Investing in stocks that increase their dividend regularly has historically proven to be a
good hedge against inflation, especially compared to investments which offer a fixed income stream over the
life of the investment. In an inflationary environment, holders of fixed income securities or fixed rate term deposits
can face sharp losses in the value of their purchasing power because the interest payments are not growing
enough in a period where prices are escalating. However, if a stock’s dividend is growing at a rate equal to or
faster than inflation, the loss of purchasing power can be prevented. Over time the income received from dividend
payments has protected the value of investments from inflation. The chart below shows how the dividend growth
of the S&P 500 index has outpaced that of inflation over the long term.
Dividend Growth Historically Outpaces Inflation.
S&P 500 Annual Dividends per share vs. US Inflation Indexed to 100 on 31/12/1946 – 30/06/2011.
4600
S&P 500 Div per Share
+30 Fold
4100
Indexed to 100
3600
3100
2600
2100
Inflaon
+9 Fold
1600
1100
600
100
1946
1954
1962
1970
1978
1986
1994
2002
2011
Source: Strategas Research Partners August 2011.
Lower Volatility: Dividend Aristocrats have a broad-based appeal in bull or bear markets. In a bull market,
these stocks tend to rise in tandem with the broader averages. And when the market slumps, investors are
inclined to sell other stocks and hang on to their dividend-paying stocks as buy-and-hold investments. That
means they're less subject to the wild price swings that other stocks have generated in recent years. Dividendpaying stocks have historically provided some stability and downside protection in volatile market environments.
Dividend-paying stocks typically have a historical record of generating strong earnings and cash flow, which
gives them the ability to pay a dividend. Investors desire their stability and income streams while seeking to
manage risk in a declining market. The reinvestment of dividends during stock market declines has also been
shown to lessen the time necessary to recoup portfolio losses.
Returns: Importantly, the return on the S&P Dividend Aristocrats index includes the dividend income from the
companies that make up the Index. In this investment climate a sustainable dividend income matters more than
ever and is likely to be a significant contributor to investment returns. As mentioned previously, dividends have
historically represented a large portion of investors’ returns and dividends provided a source of positive return
even as equity prices declined in this decade. Dividend-paying stocks have attractive investment and income
qualities, and with increasing numbers of the baby boom generation (generation born between 1946-1960)
shifting into retirement this could increase demand for dividend-paying stocks in future years.
*Source: Strategas Research Partners August 2011.
Warning: Past performance is not a reliable guide to future performance.
Warning: The value of your investment may go down as well as up. You may get back less
than you invest.
10
CANTOR FITZGERALD IRELAND LTD.
CAPITAL SECURE DIVIDEND
ARISTOCRATS BOND
The Impact of Reinvesting Dividends: Over the long term, the return from dividends has been a significant
contributor to the overall returns produced by equity securities. In their book, Triumph of the Optimists: 101
Years of Global Investment Returns* Elroy Dimson, Paul Marsh, and Mike Staunton examined the respective
contributions to returns provided by capital gains and dividends over the last century from the year 1900 to
2000. They discovered that long-term returns were largely driven by reinvested dividends. In the chart below,
they showed the cumulative contribution to return of both capital gains and dividends, in the U.S. and the U.K.
Over 101 years, they found that a market-oriented portfolio, which included reinvested dividends, would have
generated nearly 85 times the wealth generated by the same portfolio relying solely on capital gains.
The impact of reinvested dividends on cumulative US and UK equity returns 1900-2000 (Log Scale).
100,000
US: Total Return 10.1% per year
UK: Total Return 10.1% per year
US: Capital Gain 5.4% per year
UK: Capital Gain 5.1% per year
10,000
16,797
16,160
1,000
198
149
100
10
1
0
1900
1910
1920
1930
1940
1950
1960
1970
1980
1990
2000
*Princeton University Press (2002).
Earnings Quality: The ability to pay cash dividends can be a positive factor in assessing the underlying health
of a company and the quality of its earnings. This is particularly pertinent in light of the complexity of corporate
accounting and numerous recent examples of “earnings management”, including occasionally fraudulent
earnings manipulation. While no investment is without risk, companies that are committed to paying dividends
typically may have better business models, stronger balance sheets and a higher degree of confidence in their
secular growth capabilities. While there is no guarantee that dividend-paying companies will continue to pay
dividends, all of those characteristics historically have helped these companies’ stocks to outperform in difficult
and volatile times.
“Investing in Dividend Stocks is one of the
Best Ways to Build Long-Term Wealth”
Cantor Fitzgerald Ireland Ltd. Fund Management
Warning: Past performance is not a reliable guide to future performance.
CANTOR FITZGERALD IRELAND LTD.
11
CAPITAL SECURE DIVIDEND
ARISTOCRATS BOND
How Does the Risk Control Work?
Risk Control: The Capital Secure Dividend Aristocrats Bond manages risk by reducing its exposure to the
underlying Dividend Aristocrats Index in times of high volatility, and increasing exposure in times of low volatility.
This risk control mechanism can have the effect of protecting investors from volatile downward markets by
reducing losses. However, it could also potentially cause some underperformance vs. the Dividend Aristocrats
portfolio in rapidly rising markets. We have modelled the historic risk controlled exposure to the Dividend
Aristocrats in the chart below using the 10% volatility risk control overlay. The risk control mechanism successfully
reduced equity exposure substantially during the volatility of the stock market correction of 2008/2009 and it
continues to reduce exposure in periods of volatility. Exposure is then increased as markets become less volatile.
In recent times exposure to the Dividend Aristocrats has increased as volatility has fallen back toward 10%
(10.4% as at 15th February 2013). If volatility continues to fall exposure could reach the maximum level of
150%. We have found the risk control mechanism works well, reducing exposure in volatile markets and making
for better risk adjusted investment returns.
S&P Dividend Aristocrats 10% Risk Control (SPXD10EE Index) Historic Exposure & Performance Since May 2005
40%
120%
115%
110%
105%
100%
95%
90%
85%
80%
75%
70%
65%
60%
55%
50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
Risk Controlled Exposure To Dividend Aristocrats
Performance of the Dividend Aristocrats Risk Controled Index (SPXD10EE)
35%
30%
Vola le Market
Vola le Market
Vola le Market
25%
20%
15%
10%
5%
0%
-5%
-10%
Feb/13
Nov/12
Aug/12
Feb/12
May/12
Aug/11
Nov/11
May/11
Feb/11
Aug/10
Nov/10
Feb/10
May/10
Nov/09
Aug/09
Feb/09
May/09
Aug/08
Nov/08
May/08
Feb/08
Aug/07
Nov/07
Feb/07
May/07
Nov/06
Aug/06
Feb/06
May/06
Aug/05
Nov/05
May/05
-15%
Data Source: S&P, Index performance & Historic Risk Controlled Exposure to the Dividend Aristocrats from 2 May 2005– 15 February 2013.
How the exposure is calculated: The actual volatility level of the underlying Dividend Aristocrats Index
(SPDAUDT Index) is compared to the 10% target volatility every trading day. Dividend Aristocrats Index (SPDAUDT
Index) Index volatility as of 15th February 2013 was 10.4%. If the actual volatility increased beyond 10% exposure
to the Dividend Aristocrats Index will be temporarily reduced to keep volatility at a maximum level of 10%, when
volatility falls, exposure to the index will subsequently be increased but with a maximum exposure of 150% of
the index. The risk control mechanism uses this formula to calculate exposure:
Leverage = Min ( 150%, Target Volatility / Realised Volatilityt-d)
• For example when the volatility is 15% then the exposure to the index will be 66.6%.
• For example when the volatility is 6.7% then the exposure to the index will be 149.25%.
• For example when the volatility is 5% then the exposure to the index will be 150.0%.
Note: The Capital Protection options also apply at the Maturity Dates and these further reduce risk.
How Can You Invest ?
The Capital Secure Dividend Aristocrats Bond is available up to 10th May 2013 or earlier if fully subscribed. You
will need to complete the attached application form in full and return it to Cantor Fitzgerald Ireland Ltd.
Warning: Past performance is not a reliable guide to future performance.
Warning: The value of your investment may go down as well as up. You may get back less
than you invest.
12
CANTOR FITZGERALD IRELAND LTD.
CAPITAL SECURE DIVIDEND
ARISTOCRATS BOND
before the closing date, together with the required identity documentation as follows:
• 1 Certified Photo ID such as a Driving License or Passport (photo and entire document must be clear).
• 2 Original or 2 Certified Address Verifications such as utility bills or bank statements, these must be
current and within the last 6 months.
• Evidence of your PPS number (a certified copy of a pay slip, tax free allowance, tax rebate or revenue
correspondence).
• Cheque made payable to “KBC Bank Ireland plc.” or an Electronic Funds Transfer.
Who should invest in the Capital Secure Dividend Aristocrats Bond?
The Capital Secure Dividend Aristocrats Bond is designed for investors that want to invest in large market
capitalisation high dividend paying companies but are worried about the potential downside that comes with
equity investing. It is an alternative for those who typically invest some or all of their investment portfolio in
deposit accounts, bonds and lower risk funds.
How will you know how your investment is performing?
Cantor Fitzgerald Ireland Ltd. or your investment advisor will write to you each year providing an indication of
the performance to date of your Investment against your original entry level.
What happens when the account matures?
Cantor Fitzgerald Ireland Ltd., or your investment advisor, or the bank will contact you at least 30 days prior to
the Maturity Date of the Investment. Within five business days of the maturity date a cheque will be issued to
you representing the appropriate return of your capital together with any Investment Return due.
What risks are attached to the Bond?
• Equity markets are speculative and future prices may trade lower than current prices.
• The risk control mechanism could cause outperformance in rapidly falling markets but could also
underperform in rapidly rising markets.
• A U.S. or global economic recession may result in stock markets weakening significantly.
• US Economic policies, taxation policy or tax rates may change.
• Corporate earnings could fall, Dividend levels could decrease.
• Inflation may occur over the duration of your Investment and if the returns, if any, on your Investment are
lower than the rate of inflation this will reduce what you could buy in the future.
• Your investment and investment return, if any, exposes you to the credit risk of KBC Bank Ireland plc. KBC
Bank Ireland plc is a wholly owned subsidiary of KBC Bank NV.
• Investors in Option A or Option B may not receive any investment return so this investment may result in
an opportunity cost where other assets generate a higher return on investment.
• You will be unable to access your funds prior to the Maturity Date.
• Investors in Option B have 90% capital protection at the Maturity Date, and are exposed to a potential
10% loss in respect of funds invested in Option B.
• On maturity, Investors in Option B will receive the 90% capital protected amount (ie. not the 100% invested
in Option B) together with any investment returns accrued as at maturity.
Warning: Past performance is not a reliable guide to future performance.
Warning: If you invest in this product you will not have any access to your money for 3 years and 11
months.
In respect of monies invested in Option B only (ie. Where there is a full or partial investment in Option B):
Warning: If you invest in this product, you could lose 10% of the money you invest.
CANTOR FITZGERALD IRELAND LTD.
13
CAPITAL SECURE DIVIDEND
ARISTOCRATS BOND
Key Features:
How does the Capital Secure Dividend Aristocrats Bond work?
1. The parties involved are:
The Product Producer, Designer and Distributor is: Cantor Fitzgerald Ireland Ltd., 75 St. Stephen’s Green,
Dublin 2.
Cantor Fitzgerald Ireland Ltd. is regulated by the Central Bank of Ireland. Cantor Fitzgerald Ireland Ltd. is a
member firm of the London Stock Exchange and the Irish Stock Exchange. The Deposit Taker is: KBC Bank
Ireland plc, Sandwith Street, Dublin 2. KBC Bank Ireland plc is regulated by the Central Bank of Ireland.
2. Brief Description of the Benefits of the Account: The Capital Secure Dividend Aristocrats Bond
commences on the start date and has two options:
• Option A has 100% capital security and will earn a potential gross return of 50% of the performance of
the underlying strategy.
• Option B has 90% capital security and will earn a potential gross return of 145% of the performance of
the underlying strategy.
• The Investment term: 3 years 11 months.
Underlying Strategy of the Investment: The possible appreciation of the Dividend Aristocrats Risk
Controlled Index (SPXD10EE Index).
Initial Level: The initial level of the Dividend Aristocrats Risk Controlled Index (SPXD10EE Index) on the Start
Date of 27th May 2013. Details of this level will be provided in a confirmation letter to be sent to each
Depositor.
Final Level: The Final Level of the Dividend Aristocrats Risk Controlled Index (SPXD10EE Index) Index on
27th April 2017. If the performance of the underlying strategy is zero or negative the minimum return that
may be earned in Option A of the Investment is 0% (CAR 0.0%); the minimum return that may be earned
in Option B of the Investment is -10% (CAR -2.6%).
3. Dividends: The underlying index includes the dividends earned on the underlying stocks which are reinvested
into the index, thereby increasing the index for the benefit of investors.
4. Currency Risk: The capital protected amount is in Euro and will not be subject to any currency risk. As the
Index is denominated as a Euro Index there is no currency risk associated with returns.
Where does my investment go?
Your proposed investment will be used, at the date of the investment, as follows:
• 100% of your investment will be held on deposit with the Bank.
• 100% will be used for the Investment to secure the promised payment of the capital protected amount
plus any investment return after 3 years 11 months.
• If the performance of the underlying strategy is zero or negative the minimum return that may be earned
in Option A of the Investment is 0% (CAR 0.0%); the minimum return that may be earned in Option B of
the Investment is -10% (CAR -2.6%).
• Interest payable on the Account will be made after deduction of tax (if applicable).
• Any Interest payable on the Investment will be made in addition to the return of 100% of your investment
(in the case of Option A) or 90% of your investment (in the case of Option B).
• The Bank may enter into a swap arrangement with a third party whereby the Bank may agree to exchange
the income stream generated by the deposit of your investment for such sums as may be necessary to
pay any Interest due on the Account. Any such swap arrangement made by the Bank will not affect the
obligation of the Bank with regard to any Interest payable to you under the terms of issue of the Account.
14
CANTOR FITZGERALD IRELAND LTD.
CAPITAL SECURE DIVIDEND
ARISTOCRATS BOND
• Any benefit that the Bank receives from your investment over and above the Interest that is payable to
you under the terms of the Capital Secure Dividend Aristocrats Bond will be for the Bank’s own account.
Fees and charges:
Cantor Fitzgerald Ireland Ltd. will receive an indicative fee from KBC Bank Ireland plc for designing, producing
and distributing this product. Based on indicative pricing as of 28th March 2013 the fee to Cantor Fitzgerald
Ireland Ltd. will be equivalent to 3.79% of the investment amount for Option A and 4.78% of the investment
amount for Option B. This fee is not taken from your investment amount. Any authorised intermediary appointed
by Cantor Fitzgerald Ireland Ltd. may receive a fee of up to 2% in the case of option A, or 2.5% in the case of
Option B of the total amount invested for distributing this product. These fees are not taken from your investment
amount. If the volume of funds raised for the product exceeds any pre hedged amounts, or in the event of
extreme market volatility, Cantor Fitzgerald Ireland Ltd. at its sole discretion and without notice, may amend the
intermediary distribution fees payable, or withdraw the product, or cease to accept product applications. Cantor
Fitzgerald Ireland Ltd. will write to investors and confirm the final fee received after the Start Date. Any
intermediary remuneration will be paid by Cantor Fitzgerald Ireland Ltd. and will not affect the allocation of your
investment in the Capital Secure Dividend Aristocrats Bond or any Interest payable to you under the terms of
issue of the Account.
Do I have access to my investment?
Your investment is for the fixed term of the Account and is intended only for investors who do not require access
to their investment prior to the Maturity Date. No withdrawal may be made before the end of the Term. The
ongoing cost of funding the underlying structure in the Investment that will pay any interest to you on the
Maturity Date means that the capital secure portion of the Investment is payable only at the Maturity Date.
During the investment term, it may be difficult to obtain reliable information about its value or the extent of the
risks to which it is exposed. You have a cooling off period of up to 5 days which will run from the date of your
application but not beyond the closing date of the 10th May 2013. We will give you back your initial funds
deposited in such circumstances. If you wish to cancel, notice must be received in writing by Cantor Fitzgerald
Ireland Ltd., 75 St Stephens Green, Dublin 2 within 5 days of your application and also before the 10th May
2013.
What happens if I die before the Account matures?
In the event of the death of a sole investor or surviving joint account holder prior to the expiry of the Term, the
Account will continue to the Maturity Date in the name of the executor or administrator. On the death of a joint
Account holder, the money standing to the credit of the Account will be paid to or to the order of the survivor(s)
at the Maturity Date.
What about tax?
Any Interest payable at the Maturity Date of the Account is subject to Deposit Interest Retention Tax (“DIRT”)
where applicable. In relation to this Investment DIRT is currently payable at 36% with effect from 1 January
2013. On any such interest, DIRT will be deducted by the Bank prior to any Interest being paid. You should
include this interest amount, before DIRT, in your income tax return for the year in which your investment
matures. Tax relief provisions currently applying mean that, for certain investors, any Interest payable on maturity
of the Account may be exempt from DIRT. It is your responsibility to obtain any tax relief that may apply. You
should satisfy yourself in relation to Revenue reporting requirements and any implications of non-disclosure.
Both the rate of tax and tax rules are subject to change without notice.
Investors are responsible for providing any information or documentation necessary to confirm their tax status.
All investors must accurately disclose all material facts. Investors are responsible for providing any information
or documentation necessary to confirm non residency, pension fund, charity, company, etc status. If you are
unsure of your tax status or require further information, please contact your local tax office and/or refer to the
Revenue Commissioners website, www.revenue.ie. Cantor Fitzgerald Ireland Ltd. do not provide tax advice.
Independent tax advice should be sought by each investor.
CANTOR FITZGERALD IRELAND LTD.
15
CAPITAL SECURE DIVIDEND
ARISTOCRATS BOND
Terms and Conditions
‘Term’ means the duration of the Account.
1. Definitions
The following definitions apply to these Terms and
Conditions and the contents of this brochure:
‘Account’ means the Capital Secure Dividend
Aristocrats Bond Deposit Account, which commences
on the Start Date.
‘AMRF’ means Approved Minimum Retirement Fund.
‘ARF’ means Approved Retirement Fund.
‘Bank’ means KBC Bank Ireland plc and its successors,
assigns and transferees.
‘Business Day’ means a day (other than Saturday or
Sunday) on which banks in Ireland are generally open
for business.
‘CAR’ means compound annual rate.
'Cooling Off' You have a cooling off period of up to
5 days which will run from the date of your application
but not beyond the closing date of the 10th May 2013.
We will give you back your initial funds deposited in
such circumstances. If you wish to cancel, notice must
be received in writing by Cantor Fitzgerald Ireland Ltd.,
75 St Stephens Green, Dublin 2 within 5 days of your
application and also before the 10th May 2013.
‘Cantor Fitzgerald Ireland Ltd.’ means Cantor
Fitzgerald Ireland Ltd., its successors, assigns and
transferees.
2. Availability
(a) The Account is open to personal investors aged 18
or over (resident and non-resident), pension funds,
companies, charities and other institutions.
(b) The minimum deposit is €10,000.
(c) The Closing Date for receipt of applications (i.e.
completed application form(s) plus cheque
payments
and
any
other
appropriate
documentation if required) is 10th May 2013.
Applications will not be accepted after the Closing
Date. The Bank accepts no responsibility for
applications until they are physically received by
Cantor Fitzgerald Ireland Ltd.
(d) Cantor Fitzgerald Ireland Ltd. reserves the right to
close the offer of the Account at any time prior to
the Closing Date.
Prior to submitting your application, please confirm
with your Financial Advisor that the Account is still
available.
(e) Electronic fund transfers must be cleared on or
before 22nd May 2013. Cheque payments must be
cleared on or before 22nd May 2013.
‘Financial Advisor’ means Cantor Fitzgerald Ireland
Ltd. or a regulated firm that is authorised by the
Central Bank of Ireland to give investment advice and
which is an appointed agent of Cantor Fitzgerald
Ireland Ltd.
(f) All payments in relation to the Account will be
denominated in Euro. Cash cannot be accepted in
any circumstances.
‘Final Rate’ means the Index reference price on 27th
April 2017 subject to 6 month final averaging.
(g) No interest will be paid in relation to the period up
to the Start Date. Cheques or drafts received by the
Bank will be presented for payment no more than
10 Business Days before the Start Date.
‘Interest’ means the gross interest calculated in
accordance with Clause 6 .
‘Index’ means the Dividend Aristocrats Risk Controlled
Index (Bloomberg: SPXD10EE Index).
‘Maturity Date’ means 27th April 2017.
‘Realised Volatility’ means the greater of
exponentially weighted historical volatility of
Dividend Aristocrats Index over two time periods
approximately correspond to the latest 50 and
trading days respectively.
the
the
that
100
‘Start Date’ means the 27th May 2013.
‘Start Rate’ means the Index reference price on the
Start Date.
‘SPXD10EE Index’ An Excess Return Index with 10%
volatility control. The level of participation of the Index
in the Dividend Aristocrats Index is calculated daily
(with a two day delay) by dividing 10% by the Realised
Volatility of the Dividend Aristocrats Index. The
maximum participation of the Dividend Aristocrats Risk
Controlled Index in the Dividend Aristocrats Index is
150%.
16
‘You/your’ means the person(s) (natural or corporate)
depositing money in an account in accordance with
these Terms and Conditions and includes their
successors.
3. Account Opening Documentation
(a) If you are not investing in the Account on an
execution only basis, your Financial Advisor is
required to obtain and maintain sufficient
information regarding your financial circumstances
in order to enable it to fulfill its obligations in
assessing the suitability of this product for your
needs. In addition, you will need to satisfy the antimoney laundering requirements set out in the
Criminal Justice (Money Laundering and Terrorist
Financing) Act 2010.
(b) Prior to any transaction being entered into, a fully
completed Application Form together with all
relevant documentation must be received.
4. Joint Accounts
Where the Account holder comprises more than one
person then (a) the obligations of the joint Account holder to the
Bank under these Terms and Conditions, in respect
of all operations on the Account, will be joint and
several.
CANTOR FITZGERALD IRELAND LTD.
CAPITAL SECURE DIVIDEND
ARISTOCRATS BOND
(b) on the death of a joint Account holder, the money
standing to the credit of the Account will be paid
to or to the order of the survivor(s) of the joint
Account holder without prejudice to the Bank’s
rights of set-off or any other rights of the Bank
acquired by operation of law. Any such money will
be paid only at maturity.
(c) any single applicant may issue an instruction
without the consent or knowledge of the other
applicant(s).
(d) any limitation you wish to impose on the operation
of the Account should be advised on the
Application Form.
5.
Your Investment
(a) Your investment is placed in a fixed term deposit
account in your name with the Bank who is the
ultimate provider of the capital secure portion of
this investment.
(b) In relation to the Investment, if you choose Option
A, the Bank undertakes to repay 100% of your
investment in Option A at the end of the Term
together with any Interest payable in accordance
with Clause 6. If you choose Option B, the Bank
undertakes to repay 90% of your investment in
Option B at the end of the Term together with any
Interest payable in accordance with Clause 6.
6.
Interest
(a) Interest will be calculated by reference to the
performance of the Index and will not be
determined until the Maturity Date.
(b) The performance of the Index will be calculated
using the formula [(Final Rate – Start Rate)/Start
Rate].
(c) Interest payable on maturity of Option A will be
equal to 50% of the performance of the Index.
(d) Interest payable on maturity of Option B will be
equal to 145% of the performance of the Index.
(e) Interest earned on the Account will be dependent
on fluctuations in financial markets that are outside
the Bank’s control. Historical performance is no
indication of future return.
(f) In the event of any action fundamentally affecting
the availability of the Index, the Bank will be
entitled to substitute the Index or to make any
adjustment that it deems appropriate in the
calculation of Interest applicable to the Investment.
(g) The proceeds of the Investment will be paid within
five Business Days of the Maturity Date. No interest
will be paid in relation to the period between the
Maturity Date and the payment date.
(h) Any Interest payable at the Maturity Date is subject
to Deposit Interest Retention Tax where applicable.
7. Deposit Interest Retention Tax.
Any Interest payable at the Maturity Date of the
Account is subject to Deposit Interest Retention Tax
(“DIRT”) where applicable. In relation to this
Investment DIRT is currently payable at 36% with
effect from 1 January 2013. On any such interest, DIRT
will be deducted by the Bank prior to any Interest being
CANTOR FITZGERALD IRELAND LTD.
paid. You should include this interest amount, before
DIRT, in your income tax return for the year in which
your investment matures. Tax relief provisions currently
applying mean that, for certain investors, any Interest
payable on maturity of the Account may be exempt
from DIRT. It is your responsibility to obtain any tax
relief that may apply. You should satisfy yourself in
relation to Revenue reporting requirements and any
implications of non-disclosure. Both the rate of tax and
tax rules are subject to change without notice.
Investors are responsible for providing any information
or documentation necessary to confirm their tax status.
All investors must accurately disclose all material facts.
Investors are responsible for providing any information
or documentation necessary to confirm non residency,
pension fund, charity, company, etc status. If you are
unsure of your tax status or require further
information, please contact your local tax office and/or
refer to the Revenue Commissioners website,
www.revenue.ie. Cantor Fitzgerald Ireland Ltd. do not
provide tax advice. Independent tax advice should be
sought by each investor.
8. Maturity
Your financial advisor will contact you before the
maturity of the Account, advising you of the
forthcoming Maturity Date. If, for any reason, the Bank
receives no specific instructions are received as to
where to send the funds by the time the Account
matures, the proceeds will be transferred to the Bank’s
demand deposit account in your name and the
prevailing terms and conditions for the Bank’s Standard
Demand Deposit Account will apply.
9. Withdrawals
(a) Your investment is a fixed investment for the Term
of the Account and is intended only for investors
who do not require access to their investment prior
to the Maturity Date. No withdrawal may be made
before the end of the Term.
(b) In the event of the death of a sole investor or
surviving joint account holder prior to the expiry of
the Term, the Account will continue to the Maturity
Date in the name of the executor or administrator.
10. Right to Terminate Contract
You have a cooling off period of up to 5 days which
will run from the date of your application but not
beyond the closing date of the 10th May 2013. We will
give you back your initial
funds deposited in such circumstances. If you wish to
cancel, notice must be received in writing by Cantor
Fitzgerald Ireland Ltd., 75 St Stephens Green, Dublin 2
within 5 days of your application and also before the
10th May 2013.
11. Variation
Cantor Fitzgerald Ireland Ltd. reserves the right to
amend these Terms and Conditions during the Term of
the Bond where Cantor Fitzgerald Ireland Ltd., in its
absolute discretion, deems it necessary and appropriate
or where there is a material legal, tax or regulatory
change affecting these Terms and Conditions. Any
such changes will be consistent with Cantor Fitzgerald
Ireland Ltd’s obligation to act honestly, fairly and
professionally in your best interests. Cantor Fitzgerald
17
CAPITAL SECURE DIVIDEND
ARISTOCRATS BOND
Ireland Ltd. will notify you, where possible, of any
changes at least 30 days in advance of such changes
taking effect.
12. Bank Remuneration
(a) Any benefit the Bank receives from your investment
will be for the Bank’s own account and will not
affect any Interest payable to you under these
Terms and Conditions.
(b) No fees, charges or expenses are levied by the Bank
when processing your investment.
13. Fees
Cantor Fitzgerald Ireland Ltd. receives a fee for
producing and distributing this product. Any
authorized investment intermediary appointed by
Cantor Fitzgerald Ireland Ltd. may receive a fee from
Cantor Fitzgerald Ireland Ltd. for distributing this
product. These fees are set out in the Key Features part
of this brochure and are reflected in the terms of the
Investment.
14. Confidentiality
Both Cantor Fitzgerald Ireland Ltd. and the Bank
observe a duty of confidentiality about your financial
affairs. Neither Cantor Fitzgerald Ireland Ltd. nor the
Bank will disclose details of your account or your name
and address to anyone else, other than to any
confidentially appointed agents acting on our behalf
or where:
• They are permitted or compelled by law to do so.
• Disclosure is made at your request and with your
consent.
15. Unforeseen Events
(a) Cantor Fitzgerald Ireland Ltd. reserves the right not
to proceed, for whatever reason, with this Account
and to refund your investment.
(b) Neither Cantor Fitzgerald Ireland Ltd. nor the Bank
nor its agent(s) will be liable for any loss you may
suffer if either party or its agent(s) is prevented from
providing services to you as a result of industrial
action or other cause beyond the reasonable
control of either party or its agent(s).
16. Representation
(a) The Bank makes no representation, express or
implied, as to the investment terms of the Account
or the future performance of the Index or the
advisability of investing in the Account. Any such
statements herein, as well as all other statements
regarding the Account, are the sole responsibility
of Cantor Fitzgerald Ireland Ltd.
(b) The Bank acts as deposit taker and is not liable to
you for Cantor Fitzgerald Ireland Ltd’s
responsibilities in relation to the Account.
(c) The Bank accepts no responsibility for the accuracy
or otherwise of the information set out in this
brochure, nor has it verified the accuracy of such
information other than information relating directly
to KBC Bank Ireland plc.
(d) The Account is not sponsored, endorsed, sold or
promoted by any of the companies included in the
18
Index or by the Index sponsor, S&P Limited. Neither
any of these companies nor S&P Limited has any
obligation or liability in connection with the
promotion or administration of the Account.
17. Information
(a) The Terms and Conditions represent the terms of
the contract between you and the Bank. You
acknowledge that your application is made on the
basis of and is subject to these Terms and
Conditions and that you have not relied on any
representations or other information (whether oral
or written) other than as set forth herein.
(b) All information supplied to you and all
communications with you will be in English.
Information contained in this brochure is correct as
of 6th March 2013.
18. Governing law
These Terms and Conditions and any non contractual
obligations arising out of or in relation to the
Investment will be governed by and construed in
accordance with Irish law. The parties agree that the
courts of Ireland shall have exclusive jurisdiction to hear
and settle any dispute which may arise out of or in
relation to these Terms and Conditions and any non
contractual obligations and irrevocably submit to such
courts.
19. Severability
If, for any reason, a court of competent jurisdiction
finds any provision of these Terms and Conditions, or
portion thereof, to be unenforceable, that provision
shall be enforced to the maximum extent permissible
and the remainder of these Terms and Conditions shall
continue in full force and effect.
20. Disclaimer
Cantor Fitzgerald Ireland Ltd. is regulated by the
Central Bank of Ireland. Cantor Fitzgerald Ireland Ltd.
is a member firm of the London Stock Exchange and
the Irish Stock Exchange. KBC Bank Ireland plc is
regulated by the Central Bank of Ireland. Reference
within the terms and conditions of Investment and all
related documents to particular stocks, indices, pricing
sources or rates are included only to indicate the basis
upon which the Investment Return is calculated, not
to indicate any association between us or KBC Bank
and the relevant commodity, stock, index provider,
pricing source or rate provider, nor does such reference
indicate any endorsement of the Investment by such
stock, index provider, pricing source or rate provider.
The product is not in any way sponsored, sold or
promoted by any stock or commodity market, index,
related exchange, index sponsor, pricing source or
investment fund provider, and they make no warranty
or representation whatsoever, express or implied, either
as to the results to be obtained from the use of the
relevant stock or commodity market and/or the figure
at which the relevant stock or commodity market,
relevant index, related exchange,
Pricing source or investment fund level stands at any
particular time on any particular day or otherwise. They
shall not be liable (whether in negligence or otherwise)
to the investor for any error in the relevant stock or
commodity market, relevant index, related exchange,
CANTOR FITZGERALD IRELAND LTD.
CAPITAL SECURE DIVIDEND
ARISTOCRATS BOND
pricing source or relevant investment fund and shall
not be under any obligation to advise any person of
any error therein. This document has been prepared in
order to assist investors to make their own investment
decisions and is not intended to and does not
constitute personal recommendations. Specifically the
information contained in this report should not be
taken as an offer or solicitation of investment advice.
Not all investments are necessarily suitable for all
investors and CFIL recommend that specific advice
should always be sought prior to investment, based on
the particular circumstances of the investor.
21. Past Performance
Warning: Past performance is not a reliable
guide to future performance. The value of
your investment may go down as well as up.
You may get back less than you invest
22. Complaints.
If you are not satisfied with any aspect of this product
then please follow these steps: In the first instance,
please contact the Head of Compliance, Cantor
Fitzgerald Ireland Ltd. at 75 St Stephen’s Green, Dublin
2. If you are not satisfied with the outcome of the
efforts of Cantor Fitzgerald Ireland Ltd. to resolve your
complaint, you may wish to refer the matter to The
Financial Services Ombudsman’s Bureau, 3rd Floor,
Lincoln House, Lincoln Place, Dublin 2. The Financial
Services Ombudsman deals with complaints against
any regulated firm that relate to the following ‘eligible
customers’:
• Personal customers (i.e. individuals not acting in the
course of business);
• Small companies (defined as companies with
turnover less than €3m);
And
• Unincorporated bodies (includes partnerships,
trusts, clubs & charities).
23. Conflict.
In the event of any conflict or disagreement between
these Conditions, any term sheet and/or confirmation,
these Conditions shall prevail.
CANTOR FITZGERALD IRELAND LTD.
19
CAPITAL SECURE DIVIDEND
ARISTOCRATS BOND
Data Protection
KBC Bank and Cantor Fitzgerald Ireland Ltd. will be joint
data controllers.
• to our agents, advisers, service providers and contractors
for the above purposes;
Your Personal Data
• to other persons connected with your account (e.g.
company directors, partners etc) and to your financial
advisers or other intermediaries;
Your account is with KBC Bank who is a data controller.
KBC Bank will use your information for the purposes of
opening and maintaining your account. Cantor Fitzgerald
Ireland Ltd. is a joint data controller with KBC Bank. Please
refer to section below for details of how Cantor Fitzgerald
Ireland Ltd. may use your data. Please refer to your broker
or intermediary for information on how they will use your
information.
How Cantor Fitzgerald Ireland Ltd. uses your
information and who we share it with:
Cantor Fitzgerald Ireland Ltd. restricts access to non-public
information about its clients to those who need to know
that information in order to provide products or services.
Cantor Fitzgerald Ireland Ltd. maintains physical, electronic,
and procedural safeguards to guard your non-public
personal information. Please be advised that by formally
investing in the Bond, you will be consenting to the
transmission of your data outside of the EU/EEA where this
is permitted under the Data Protection legislation in Ireland.
In accordance with the Data Protection legislation in
Ireland, you are entitled to a copy of the information that
Cantor Fitzgerald Ireland Ltd. holds about you on
computer, on payment of a fee which is capped by the
Data Protection Commissioner of Ireland. In the first
instance, you should direct any such request to your broker.
Cantor Fitzgerald Ireland Ltd., 75 St. Stephen's Green,
Dublin 2. Ireland. Cantor Fitzgerald Ireland Ltd. is a
Member Firm of The Irish Stock Exchange and The London
Stock Exchange. Cantor Fitzgerald Ireland Ltd. is regulated
by the Central Bank of Ireland.
• in the context of a sale of our business; or
• where KBCI is required by any regulatory body, law
enforcement agency, court or other legal process.
Electronic Communications and Phone Calls: Your
Information will be processed, recorded and retained by
KBCI in electronic form. You agree that KBCI may
communicate with you electronically in relation to your
accounts, and that it may rely on such electronic
communications, records, originals and documents in any
dealing with you. KBCI may monitor and record telephone
calls made to and from KBCI for fraud and crime
prevention, to assist in improving customer services, to
evidence instructions or to prevent or resolve disputes.
Right of Access: You have the right to receive a copy of
all personal data (within the meaning of the Data
Protection Acts 1988 and 2003) relating to you which is
held by KBCI following a written request (for which a small
fee will be charged) and to have any inaccuracies in your
personal data corrected. You may be required to provide
KBCI with sufficient information to verify your identity and
locate your data. By signing the General Declaration
section of the Application Form, you confirm that you
consent to the use of the Information in the manner
described above and, if applicable, that you have obtained
the consent of all other persons identified in the form or
associated with the application.
How KBC Bank Ireland plc uses your information and
who we share it with:
Your Information: The details provided in this application
form, together with any other information that is furnished
to KBC Bank Ireland plc in connection with this application
or your account (“Information”), will be retained and
processed by KBC Bank Ireland plc and its subsidiary
companies (“KBCI”) for the following purposes:• processing and assessing the application(s);
• administrating your account;
• verifying the Information and otherwise meeting KBCI’s
legal and compliance obligations (which include those
relating to the prevention of money laundering, financing
of terrorism and fraud);
• quality control and group reporting and management;
and
• if you have consented, for marketing purposes.
Disclosures: KBCI may disclose Information in the
following circumstances:
• to other companies within the KBC Bank Group;
20
CANTOR FITZGERALD IRELAND LTD.
CAPITAL SECURE DIVIDEND ARISTOCRATS BOND
Personal Application Form Please complete all sections in full.
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I/We hereby apply for the Cantor Fitzgerald Ireland Ltd. Capital Secure Dividend Aristocrats Bond and for that purpose I/we hereby
request you to open an account with KBC Bank Ireland plc in the name(s) of:
Principal Name:
Title: Mr
Maiden Name (if applicable):
Mrs
Ms
PPS No: (please include PPS evidence):
Address:
Contact No:
Email:
Date of Birth:
Place of Birth:
Nationality:
Occupation:
Source of Funds:
Employment Status: PAYE
Savings
Sale of Assets
Gift/Inheritance
Windfall Gain
Self-Employed
Other (please specify)
Settlement/Compensation
Other (please specify)
Second Name:
Title: Mr
Maiden Name (if applicable):
Mrs
Ms
PPS No: (please include PPS evidence):
Address:
Contact No:
Email:
Date of Birth:
Place of Birth:
Nationality:
Occupation:
Source of Funds:
Employment Status: PAYE
Savings
Sale of Assets
Gift/Inheritance
Windfall Gain
Self-Employed
Other (please specify)
Settlement/Compensation
Other (please specify)
Please confirm the following:
1. My/Our investment objective is: Capital security
Capital growth
2. I/We qualify for the following taxation classification DIRT
Income generation
Other*
*Relevant documentation will be required for tax-free status in the case of qualifying individuals aged over 65 and non-Irish residents.
Joint Accounts: Please select one of the following: Statements and/or correspondence are to be sent to: jointly, to the first address
individually, to each address
Please state any limitations that you wish to place on the Account:
Warning: In the absence of instructions to the contrary, the Bank may act on the instruction of any
single Joint Account Holder without the knowledge of any other Joint Account Holder.
I/We wish to invest €
in Option A (100% Capital Secure).
I/We wish to invest €
in Option B (90% Capital Secure).
Total Investment
Minimum investment is €10,000 for each of the Options.
€
Please make cheques payable/arrange funds transfer to “KBC Bank Ireland plc.” For EFTs Account details as follows::
Bank:
Account Number:
IBAN:
Account Name:
Ulster Bank
12254215
IE18ULSB98501012254215
KBC Bank Ireland plc Deposit Account
Address:
Sort Code:
BIC:
Account Reference:
33 College Green, Dublin 2
98-50-10
ULSBIE2D
Client Name/ Dividend Aristocrats Bond.
NB: All transfers must include your name as a reference.
FORM CONTINUED OVERLEAF
CAPITAL SECURE DIVIDEND ARISTOCRATS BOND
Personal Application Form Continued
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Declaration:
I/We hereby request and authorise you: (1) to open and administer an account for me/us with KBC Bank Ireland plc and
(2) to give effect until the end of the Term.
I/ We declare that: (1) the details above are correct;
(2) I/we are over 18 and
(3) I/we understand and accept (1) the Terms and Conditions and (2) the Data Protection paragraphs set out in this brochure.
Sensitive Data Consent: Sensitive personal data (such as health or criminal conviction data) will be obtained and processed
only where necessary to process your application or account. By signing this form, you are explicitly consenting to the use,
retention and reproduction of sensitive personal data for such purposes and you acknowledge that if you do not permit
such processing, it will not be possible to provide you with this product.
(4) I/We have sufficient other funds available in the event of an emergency arising to cover any expenses (such as medical and
long term care) that may occur during the investment term.
(5) I/We were offered the facility of having a full financial review performed and, in such circumstances, were afforded the
opportunity to avail of having a third party present during the investment sales process.
I/We understand that: (A) the investment will not be deemed to have been made until the application has been accepted
and that, if and when accepted, the investment will commence on 27th May 2013; (B) capital security is provided by the
Bank; and (C) there is no access to the funds invested until maturity.
(6) Investment advice declaration, I/We declare that:
Yes I/We have received professional investment advice.
No I/We have NOT received professional investment advice and wish to proceed on an Execution Only Basis.
I/we acknowledge that I/we have requested information on the Capital Secure Dividend Aristocrats Bond Account and
confirm that I/we do not wish to provide information in respect of my/ our financial history and investment objectives to
determine the suitability of this investment for my/our purposes but wish to proceed with the investment on an execution
only basis. By doing so I/we acknowledge that I/we are waiving my/our right(s) as a Consumer in relation to the suitability of
this product. I/We have not obtained any assistance in the choice of product from the Intermediary.
Principal signature:
Date:
Second signature:
Date:
The section below is only to be completed by a Regulated Intermediary (if applicable).
Intermediary Declaration:
1. I, the undersigned, declare that I have sighted all original relevant money laundering documentation in respect of the Client(s) as per the Criminal
Justice (Money Laundering & Terrorist Financing) Act 2010 (the “AML Act”) and any codes/instructions issued or approved by the Central Bank of
Ireland or any other appropriate body, and have provided copies of the original documentation to KBC Bank Ireland plc. I certify that I will retain
same for the required period of time taking into account the AML Act, any codes/instructions issued or approved by the Central Bank of Ireland
or any other appropriate body and all other relevant legislation including but not limited to the Companies Acts 1963-1990 and the Statute of
Limitations 1957-1991.
2. I confirm that the applicant(s) have received this brochure prior to investing and the investment was sufficiently explained. If the applicant(s)
has/have obtained assistance in relation to this investment, appropriate fact-find and suitability obligations have been performed.
3. Where, during discussions with the applicant(s), you have identified any vulnerabilities, please advise the nature of the vulnerability:
4. If the application is being made on an Execution Only basis, the applicant(s) has(ve) been warned in writing that I do not have the
information necessary to determine the suitability of this product for the applicant(s).
Intermediary Name:
Intermediary Signature:
Warning: The value of your investment may go down as well as up. You may get back less than you invest.
Warning: If you invest in this product you will not have any access to your money for 3 years and 11 months.
Warning: Past Performance is not a reliable guide to future performance.
In respect of monies invested in Option B only (ie. Where there is a full or partial investment in Option B):
Warning: If you invest in this product, you could lose 10% of the money you invest
CANTOR FITZGERALD IRELAND LTD. 75 ST. STEPHEN’S GREEN, DUBLIN 2, IRELAND. TEL: +353 1 633 3800. FAX : +353 1 6333857/6333856.
CAPITAL SECURE DIVIDEND
ARISTOCRATS BOND
Investment Check List For Each Individual
Investor
Please complete the attached application form in full. The intermediary declaration on page 2 of application
form should only be completed by an intermediary if a regulated intermediary has been involved in the sales
process, otherwise this section can be completed by Cantor Fitzgerald Ireland Limited on receipt of your
application.
Please include 1 Certified Photo ID such as a valid Driving License or a valid Passport. Photo, government /
document number and the entire document must be visible and also clearly legible. The document must be
in date, the photo must be clear and recognisable and the name must correspond exactly to the name on
the application form.
Include 2 Original or 2 Certified Address Verifications such as utility bills or bank statements, these must be
current and within the last 6 months and the addresses must correspond exactly to the address on the
application form. Any type of Internet Printout to be used as Proof of Address is not acceptable.
Include Certified Evidence of your PPS number, such as a certified copy of a pay slip, tax free allowance, tax
rebate or revenue correspondence. The PPS Number must match the number provided on the Application.
Include Payment, A Cheque made payable to “KBC Bank Ireland plc.” or an Electronic Funds Transfer.
Return all of the above to Cantor Fitzgerald Ireland Limited well before the closing date. It is very advisable
to send in applications well in advance of the closing date to avoid disappointment, we often receive
hundreds of applications in the closing days, and if there are any issues with any of the above, we may not
have sufficient time to contact you, and your investment may not proceed.
A Brief Guide to Forms of Proof of Identity & Address:
•
A certified copy is one which has been signed, stamped, dated and certified as “A True Copy of The Original
Document” by a bank manager, Commissioner for Oaths, Garda Síochána or a practicing solicitor/
accountant or a regulated appointed Investment advisor. Please quote the FCCA (or equivalent) of the
accountant who has certified the AML. Alternatively, if you choose to call into a Dolmen office with the
originals, we will gladly take a copy of the relevant documents and certify them.
•
A certified copy of a current Passport or Driving License with photograph: If the name on the ID/proof of
address is different to that on the account, e.g. married name, maiden name, etc, please provide a certified
copy of the marriage certificate or similar documentation.
•
TWO original/certified copies of utility bills or statements: Any type of Internet Printout to be used as Proof
of Address is not acceptable. Original electricity, phone, gas bills, tax letters and revenue certificates within
the last 6 months are all acceptable. Bank statements of current accounts, savings accounts, credit unions
statements etc. are all acceptable once they are dated within the last 6 months and are not Internet Printouts.
However, 2 Bank Statements issued on the same account for different months only count as 1 Proof of
Address. Documents must bear the name and address provided on the application for each named person
on the account and may not be more than 6 months old. Invoices are not recognised as valid proof of
address. Please note that all documents being used as proof of address must be from a regulated body.
CANTOR FITZGERALD IRELAND LTD.
23
CANTOR FITZGERALD IRELAND LTD.,
75 St. Stephen’s Green, Dublin 2, Ireland.
Tel : +353 1 633 3800. Fax : +353 1 6333857/6333856.
email:
[email protected]
web:
www.cantorfitzgerald.ie
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